Advice & Tips Cover Story Franchisee January/February 2022 Resource Articles

Q&A: Franchisee Trends & Transitions

Consultant Angela Coté shares what’s trending in franchising now, the impact of the pandemic, and advice for starting your own business in 2022

By Angela Coté, Angela Coté Inc

What categories will be popular in 2022 for franchisees? Which industries/sectors are you seeing the most interest in?

The biggest increase is in home services, and I’d say that’s partly because of the pandemic. But also, I really think it’s because of an increased awareness of what a franchised business can be. People who aren’t too familiar with franchising associate it with quick service restaurants, coffee chains, that sort of thing. But during the pandemic, people have started to become more aware of home-based and mobile service franchises that require a lower investment to get into.

During the pandemic, home services were generally not locked down because they were deemed essential. That included things like cleaning businesses and outdoor businesses like lawn maintenance companies, house painting—those sectors really picked up. Restoration has also been big. There’s been some really unique, niche concepts that are gaining popularity: barbecue cleaning, dryer vent cleaning, closet renos, kitchen renos, pool cleaning, and chimney cleaning.

As people realize you can use the franchise model to grow your business, I’m also seeing an increase in mom-friendly businesses that can be run while taking care of kids—things like fitness, education businesses, coding, tutoring, even lice removal. It provides an opportunity for moms to make an income, have some purpose, yet still take care of their kids.

I think what’s happening is that, as awareness of franchising as a business model increases, more people with successful small businesses are considering using the franchising model for more unique opportunities.

What are some big trends you see coming in 2022? What are people looking for in a franchise opportunity?

People are definitely thinking about whether a business is “pandemic-proof.” They’ll consider if a business is an essential business, and what businesses temporarily closed during the pandemic, and that will factor into their decision.

But aside from the pandemic, the increased awareness that there are lower investment franchises out there is going to continue. I don’t think brick and mortar businesses are going away, for the most part, though—people will still invest in businesses that are brick and mortar, but they’re going to scrutinize the rent costs more, and really analyze the metrics of the business.

There’s also a trend, or a continued upswing, of people leaving corporate jobs. The pandemic led to a lot of people either being laid off or just reevaluating their life and purpose. I don’t see that changing in 2022—I see that increasing.

What effects of the pandemic do you see playing out in the franchising industry? How has the pandemic changed things?

The pandemic has offered people the opportunity to reevaluate, which has led to a tough labour market, making it difficult to get employees. Franchisors are having to react to this by really improving their employee environments—gone are the days of bossing people around, because they’ll just leave and go somewhere else.

I think this has really opened the door to improve the culture of companies, and made companies think about how to attract and retain people. Ultimately, I think this is a really good thing—it’s going to become the norm to have a good environment for employees.

The pandemic has also led to an increase in the technology people use to automate processes, and may even lead to technology replacing roles. People are getting more comfortable with technology because they had to, from Zoom to QR codes. This may lead to lower labour costs for franchisees, with less hands-on work required in some situations.

What demographics of people do you find come to you as prospective franchisees looking to start their own business? Has this changed at all in recent years? Do you see any trends going forward in the type of person who is drawn to franchising?

One is the emergence of Gen Z. I’m definitely seeing younger people explore the opportunity to get into small business ownership than in the past. That generation is very driven by impact and purpose, and how they can make the community around them better. They’re very concerned with global causes. I think the seemingly alternative or non-traditional businesses are giving Gen Z opportunities to become small business owners. Even with something like a carpet cleaning or a dryer vent business, they can probably find some purpose in it—whether that’s from an environmental perspective, or the opportunity to create jobs for other people.

Since there are a lot more low-investment opportunities out there, franchisees are not just big investors. It’s everyday people who would never have thought of owning a business. In fact, I’m running a roundtable for my franchisor community about how to get their customers to think about becoming a franchisee, because that’s happening more and more.

Along with young people, I’m seeing more prospective franchisees in their mid-40s. These are often parents of grown children who find themselves realizing that with their kids off at university, they’re financially prepared to take that leap. They’re done working for someone else, and they want to invest in themselves.

Why is franchising the right choice for entrepreneurs looking to start their own business in 2022?

I feel like I have to preface this with, it’s not the right choice for everyone! It’s the right choice for entrepreneurs who’ve done a lot of introspection on whether or not being a franchisee is the right fit for them. But for people that would make a good franchisee, it offers an opportunity to do something you love.

I talk to a lot of people who are working for someone else, and they say, “It’s steady pay, but I’m not tapping into my purpose.” Figure out what your purpose is, and what impact you want to make, and there’s probably a business out there that you can use as a conduit to tap into that.

What advice to do you have for prospective franchisees who are considering getting started now?

Really assess what drives you, what motivates you—look at whether you have the right DNA to be a successful, high-performing franchisee. Because, for instance, if you’re going to be running a team of people and you hate the idea of having to schedule and motivate your team, then you’re never going to be happy as a franchisee. So really self-assess.

And then I would say, look at a lot of options, and ask the same questions to the different franchisors you’re talking to. Trust your gut—it has to feel like a fit. As the guest host on the Franchise Canada Chats podcast, I’ve had conversations with a lot of different franchisees, and whenever I’ve asked, “At the end of the day, what was it that made you decide to take this opportunity?” they all say, “I just knew.” It was a culture fit, they felt like the franchisor was going to take care of them.

Take the time to find the thing that you love. Because if you love it, it’ll be so much easier to get up every day and go do that thing.

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